I’ve written several posts on the asset protection limits available to consumers who have invested in a variety of financial assets. With all the changes and adjustments that have taken place in the last few months in the financial landscape, I thought it might be helpful to provide a single article summarizing the insurance /protections currently available to investors.

Some protections are temporary for now, while others appear to be permanent. I expect there will be future modifications of federal protections if there are changes in the condition of the financial markets, for good or ill.

Funds Insured by the FDIC
These include bank certificates of deposit, bank money market accounts, checking and savings accounts and other accounts held. Until the end of 2009, FDIC insurance limits for these accounts have been raised to $250,000 per depositor per institution. It’s possible to have significantly more total coverage than this through the use of multiple accounts at the same bank. The FDIC provides a useful insurance limit calculator. Detailed information on this topic and related links are available with the article,How Much FDIC Insurance Can I Have at One Bank?

Brokerage Accounts
Funds held in brokerage accounts are generally protected by the Securities Investor Protection Corporation (SIPC). This insurance replaces a $500,000 in missing assets if your brokerage firm fails; up to $100,000 of this can be in cash. There is special limits involved and mutual funds are covered only if held in brokerage accounts. More details and links are available in the article,Are Your Investments Insured?

Insurance Contracts and Annuities
If an insurance company fails, policyholders have priority over the company’s other creditors. In addition, most states maintain guaranty funds to ensure policyholders against losses. Typically, state guaranty funds cover shortfalls of up to $300,000 in life insurance benefits, $100,000 in cash surrender or withdrawal values, $100,000 in withdrawal and cash values for annuities, and $100,000 in health insurance policy benefits. For details and links, see the post,
What Happens To Your Insurance Policy When the Insurer Fails?

We can only hope that no more financial shoes will drop, and that the protections currently in place will be enough to keep investors from adding to the destabilization of the markets.